Instructions For Schedule S (Form 1120-F) - 2015 (Page 3 of 4) in pdf

section 1.883-2(d)(3) as a qualified

Line 10b(ii). Enter the applicable

shares owned by the qualified U.S.

shareholder if such person's interest in the

two-letter codes from the list of country

persons and maintained in a

foreign corporation, or in any intermediary

codes at

dematerialized or immobilized book-entry

corporation, is held through bearer shares

system. The denominator is the total value

Part III — Stock Ownership

that are not maintained in a dematerialized

of all the CFC's outstanding stock,

or immobilized book-entry system during

including the value of any bearer shares.

Test for Controlled

the relevant period. See Regulations

Foreign Corporations

Line 12. Specify the days of the foreign

section 1.883-2(d)(3)(ii).

corporation's tax year during which more

A foreign corporation satisfies the stock

For purposes of the above rules, a 5%

than 50% of the total value of its

ownership test of Regulations section

shareholder is a person who owns at

outstanding stock was owned (within the

1.883-1(c)(2) if it satisfies the qualified

least 5% of the total vote and value of the

meaning of section 958(a) and

U.S. person ownership test (see below)

outstanding shares of a class of stock. For

Regulations section 1.883-3(b)(4)) by

and it satisfies the substantiation

these purposes, persons related within the

qualified U.S. persons.

requirements of Regulations section

meaning of section 267(b) shall be treated

Line 13. Specify the days of the foreign

1.883-3(c).

as one person. In determining whether two

corporation's tax year during which it was

or more corporations are members of the

Qualified U.S. person ownership test.

a CFC (as defined in section 957(a)).

same controlled group under section

This test is met only if:

267(b)(3), a person is considered to own

Part IV — Qualified

1. The foreign corporation is a CFC

stock owned directly by such person,

(as defined in section 957(a)) for more

Shareholder Stock

stock owned through the application of

than half the days in the corporation's tax

section 1563(e)(1), and stock owned

Ownership Test

year, and

through the application of section 267(c).

A foreign corporation satisfies the stock

2. More than 50% of the total value of

In determining whether a corporation is

ownership test of Regulations section

its outstanding stock is owned (within the

related to a partnership under section

1.883-1(c)(2) if more than 50% of the

meaning of section 958(a) and

267(b)(10), a person is considered to own

value of its outstanding shares is owned,

Regulations section 1.883-3(b)(4)) by one

the partnership interest owned directly by

or treated as owned, by applying the

or more qualified U.S. persons (defined

such person and the partnership interest

attribution rules of Regulations section

below) for more than half the days of the

owned through the application of section

1.883-4(c), for at least half of the number

CFC's tax year, provided such days of

267(e)(3).

of days in the foreign corporation's tax

ownership are concurrent with the time

year by one or more qualified

Note. An investment company (as

period during which the foreign

shareholders, as defined below. A

defined in Regulations section 1.883-2(d)

corporation was a CFC (as defined in item

shareholder may be a qualified

(3)(iii)(B)) shall not be treated as a 5%

1 above).

shareholder with respect to one category

shareholder.

of income while not being a qualified

Line 8. Enter on line 8 a description of

shareholder with respect to another. A

A qualified U.S. person is a U.S. citizen,

each class of stock the foreign corporation

foreign corporation will not be considered

resident alien, domestic corporation, or

relied upon to satisfy the requirements of

to satisfy the qualified shareholder stock

domestic trust described in section 501(a),

the “regularly traded” test described

ownership test unless the foreign

but only if the person provides the CFC

earlier. The description must include:

corporation meets the substantiation and

with an ownership statement as described

An indication as to whether the class of

reporting requirements described in

in Regulations section 1.883-3(c)(2), and

stock was issued in registered or bearer

Regulations section 1.883-4(d) and (e).

the CFC meets the reporting requirements

form and whether such bearer shares

of Regulations section 1.883-3(d) with

A shareholder is a qualified

were maintained in a dematerialized or

respect to that person.

shareholder only if the shareholder:

immobilized book-entry system.

The number of issued and outstanding

Line 11a. Enter the percentage of the

1. With respect to the category of

value of the shares of the CFC that is

shares in that class of stock as of the

income for which the foreign corporation is

owned by all qualified U.S. persons

close of the tax year, and

seeking an exemption, is:

identified in the qualified ownership

The value of each class of stock in

(A) An individual who is a resident of a

statements. In determining the percentage

relation to the total value of all the

qualified foreign country. An individual

to enter on line 11, the numerator is the

corporation's shares outstanding as of the

is a resident of a qualified foreign

total value of the CFC's outstanding stock

close of the tax year.

country only if the individual is fully

that is owned (within the meaning of

liable to tax as a resident in such

Line 9. See Regularly traded, earlier, for

section 958(a) and Regulations section

country (e.g., an individual who is

instructions for completing this line 9.

1.883-3(b)(4)) by all qualified U.S.

liable to tax on a remittance basis in a

persons, not including the value of any

Line 10. If the answer to line 9 is “Yes”

foreign country will not be treated as a

bearer shares (unless such shares are

with respect to more than one class of the

resident of that country unless all

maintained in a dematerialized or

corporation's stock, the foreign

residents of that country are taxed on

immobilized book-entry system). The

corporation must complete lines 10a and

a remittance basis only) and, in

denominator is the total value of the CFC's

10b with respect to each such class. To do

addition (1) the individual has a tax

outstanding stock, including the value of

so, complete these lines as follows:

home, within the meaning of

any bearer shares.

Complete line 10 of the actual schedule

Regulations section 1.883-4(b)(2)(ii),

for the class of stock with respect to which

in that qualified foreign country for 183

Line 11b. Enter the percentage of the

5% shareholders own the largest

days or more of the tax year or (2) the

value of the outstanding shares of the

percentage of the vote and value of the

individual is treated as a resident of a

CFC that are bearer shares maintained in

outstanding shares of the class of stock.

qualified foreign country based on

a dematerialized or immobilized

For all other classes of stock, attach a

special rules pursuant to Regulations

book-entry system. In determining the

statement that uses the same format as

section 1.883-4(d)(3).

percentage to enter on line 11b, the

lines 10a and 10b.

(B) The government of a qualified

numerator is the total value of bearer

foreign country (or a political

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Instructions For Schedule S (Form 1120-F) - 2015 Page 3

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